REPORTS

A decade after the Great Recession a lot has changed in financial services. But much has also stayed the same. Not including regulator-enforced bank rescues, league tables of the largest financial services organisations in Europe, and across the Middle East and Africa, are much the same as before the crash. Despite a dent to revenues, and share prices between 2008 and 2010, global bank market capitalisation has grown nearly 50% in the years since. Trust in banking has also bounced back – UK consumers’ trust in banks is at the same level as high street retailers. At a time when the number of bank branches in Europe has declined by a fifth, and the number of banks by nearly a quarter, since 2008.
But all is not quite as it seems.

The latest ‘Nordic Fintech Disruptors Report 2018’ and wide-ranging survey on financial institutions, fintech start-ups and ecosystem participants across the Nordic and Baltic region reveals that greater cooperation between regulators, banks and innovators is essential to the region’s status as a leading fintech hub.

According to the survey conducted by MagnaCarta and Fintech Mundi on behalf of Mastercard, more than four fifths (84%) of traditional players are now actively seeking partnerships with fintechs to help them digitise and create digital services for customers. They believe that collaborating with fintechs will help them to achieve their goals faster and more cost effectively.

A year is a long time in fintech. This year’s research, the third in our series on the impact of fintech disruption across Europe, the Middle East and Africa, underscores some of the early gains made by banks and fintechs in some parts of the region, along the journey from electronic to digital finance. And reviews what success looks like in this brave new world.

The research reveals that the first phase of the fintech wave, characterised by recognition of the need for collaboration between ecosystem partners, is coming to an end and identifies two conflicting forces that need to be reconciled before the next phase can begin.

As the survey results show, the journey is far from complete. Indeed, as the tech industry culture of agile, always-on improvement takes hold, it may never be truly over.

This second edition of our review of fintech trends and perspectives across Europe, the Middle East and Africa reveals the extent of the progress made so far in bridging the divide between new fintech innovators and established financial institutions. It also explains the mutually beneficial reasons for what at times appears an unwieldy alliance.

The report takes in the findings from an industry-wide survey of banks and established financial institutions, fintech start-ups and ecosystem participants alongside insights from over 20 interviews with financial institutions across Europe, fintech founders, investors and enterprise-level technology firms.

As we launch the second edition of our review of Nordic financial innovation, this year extended to incorporate the results of an industry-wide regional survey, it’s clear that the region has moved on. While elements of conservatism remain, and perhaps rightly, the research suggests that bank-fintech collaboration – as in other parts of Europe – is increasingly normal, and that the divergence is narrowing. Among survey respondents, 74% of Nordic banks said are they engaging in partnerships with fintechs, compared to 78% across the whole of Europe.

The Fintech Disruptors Report: Nordic Edition takes stock of the shifting currents of fintech innovation across Europe and the Nordic countries to chart the course for the new phase of financial services delivery.

The report is the result of interviews with more than 30 start-ups and incumbent banks across Europe and the Nordic region. Conducted between November 2015 and February 2016, it explores the breadth of the fintech ecosystem and makes the call for the continued support of the region’s raft of upstart innovators as they seek to re-make finance for the digital era.

The result of a series of interviews carried out between September and November 2015 with banks, incumbent financial institutions and high profile startups in Europe and the Middle East, the report highlights the forces shaping financial services delivery across the region.

It also seeks to provide insight into the lessons learnt by companies both old and new as they innovate and a roadmap for the years ahead as ‘digital’ migrates from delivery channel to the driving force in modern banking.

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